Rhimes, who created some of ABC's most popular shows, like Grey's Anatomy and Scandal, will make original content for Netflix in a multiyear agreement. Under the terms of the deal, she will also continue to be involved in her ABC shows that are currently on air or in development.
The new partnership not only highlights Rhimes's entrepreneurial decision to find the best platform for her content, but it also shows the democratization of TV distribution that didn't exist a few years ago. While Rhimes got her start on ABC, her decision sets an example for other TV entrepreneurs and proves they don't need to follow traditional routes to be successful.
"He understood what I was looking for -- the opportunity to build a vibrant new storytelling home for writers with the unique creative freedom and instantaneous global reach provided by Netflix's singular sense of innovation," Rhimes said of Ted Sarandos, Netflix's chief content officer, in a statement announcing the Netflix deal. "The future of ShondaLand at Netflix has limitless possibilities."
This is a massive coup for Netflix, as Rhimes is one of the strongest forces at ABC. Her shows have strong followings and built ABC's popular Thursday night lineup, which earned the nickname #TGIT (Thank God It's Thursday). Rhimes's programs earned ABC an estimated $2 billion from rerun sales, licensing, and advertising, people familiar with the matter told The Wall Street Journal. What's more, her production deal with ABC was more than $10 million a year. While Netflix already has a powerful portfolio of creators, onboarding Rhimes will help it continue to build its original content as it also moves away from licensing programming from other sources.
Just last week, Netflix made its first-ever acquisition in its 20-year history and purchased Millarworld, the comic book publisher known for stories like Kick Ass and Kingsman. Then, on August 8, Disney announced it plans to pull its content from Netflix by 2019 as it creates its own streaming services. While it's unclear if Disney's recent announcement had anything to do with Rhimes's decision, the repercussions of the split are sure to be felt in the near future.